David Prosser: The iPhone row that threatens to take a bite out of Apple


Outlook The test of a company can often be how it responds in the face of adversity, so it will be fascinating to watch Apple over the coming days and weeks. It is so used to being feted for its technological wizardry that the complaints it is getting about the iPhone 4 must have come as something of an unpleasant shock.

Initially, Apple appeared pretty dismissive about complaints that users of its latest iPhone got a poor reception if they held it the wrong way, and the row seemed a bit of a joke. Now it has simply gone quiet about the affair, while the growing speculation that consumer watchdogs in the US and elsewhere may force it into a product recall are no laughing matter. That speculation wiped almost $10bn off the value of the company on Tuesday, the sort of loss that is going to be difficult to ignore if it continues.

It must be said that Apple – for all its stunning execution of product and its formidable marketing skills – is not a business that seems to take well to criticism. There have already been claims from some bloggers that Apple has been censoring negative comments about the latest reports on its blockbuster smartphone, about which there have been other complaints too.

But then this is a company with something of a track record. Look, for example, at its heavy-handed response when a prototype of the new iPhone fell into the hands of a journalist earlier this year. Despite getting its phone back, Apple called in the police who raided the apartment of the editor of Gizmodo, the website that dared to publish the story.

This has not been a good week for Apple – the way in which its iTunes online store was so comprehensively hacked was embarrassing to say the least – which is not something we are used to saying about the company.

Its rash of bad luck will no doubt encourage rivals such as Google, but the greater danger for Apple is that it does not change its attitude to reflect the way its status has changed with its success.

When Apple was taking on the big boys of technology, its enigmatic spikiness – personified by Steve Jobs, the boss – was an asset that encouraged its followers to feel part of an exclusive club of mavericks. Now that Apple is a world leader in consumer electronics, with millions of customers who want its expensive products to work perfectly, rather than to signal their membership of a clique, it risks coming across as simply arrogant.

Thanks to some astonishing product launches, Apple has become one of the world's most valuable brands in a remarkably short space of time. But it could lose that value just as quickly.

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